A string of Yahoo sales, engineering and product executives took the stage on Wednesday in the company's first full-day briefing with analysts since May 2006, all with a mantra that came down from on high: "Today is the beginning of a journey back to respect," said CEO Carol Bartz.

With page views increasing, Carl Icahn having drawn in his horns, and the company extending a deadline for finalizing a search agreement with Microsoft, the time was right for a love-in.

Finance Chief Tim Morse said Yahoo expects to achieve operating margins between 15 percent and 20 percent by 2012. After the third quarter's "pathetic" 6 percent, shareholders would certainly consider that a more respectful performance.

Another way to show their respect would have been to give specific details on the engineering involved in the promised prestige. Executives said Yahoo would achieve the new margin targets by accelerating its revenue in the next few years, but demurred from providing a specific revenue growth target.

The company said it would invest in editorial staff to produce more original features, and tweak its online products to keep users on the site longer and boost advertising revenue.

Hiring more staff and investing in ad search wizardry will certainly add to costs, so the need for a little more Internet alchemy could require a leap of faith to engineer the recovery in esteem Yahoo hopes to achieve.

We had a hard time finding the good news in Monday’s report that U.S. newspaper circulation has fallen more than 10 percent, based on an analysis of 379 daily papers. Thank goodness for the newspapers whose publishers helped them understand why losing hundreds or thousands of paying readers is good.

Most papers acknowledged deep declines in circulation, but explained it in one of the following ways:

• We had to clear out all the bulk copies sold at discount. (I’m still not sure how this one works because I recall publishers saying this a couple of years ago. How many deadwood readers are there?)
• We shrank our coverage area so of course we lost some circulation. It tells advertisers that they’re getting a BETTER quality of reader.
• We’re charging more for the paper so circulation revenue has risen, and anyway, who wants to rely on a business as fickle as advertising (the one that lined our owners’ pockets for the past 150 years.)?
• Readership is rising on the Internet.
• At least we didn’t get whacked as bad as the next guy.

All these statements are true, and they all are good business moves. What I can’t find among the numbers is what percent of print decline at many of these papers is because of the other reasons that you hear from people. Some are legitimate, some aren’t and some are just silly. All say one thing: Many people don’t pay for the paper anymore, which means there’s less money to keep them in business. (Don’t believe us? Ask the Rocky Mountain News and the Seattle Post-Intelligencer):

• I hate my newspaper
• My newspaper doesn’t have anything interesting in it
• News is boring
• News is free on the Internet
• My newspaper is biased to the right/left/middle/other Little League team than the one my kid is on
• My paper stopped running Garfield in the funnies. It doesn’t run Hints From Heloise anymore.
• You can’t get good TV listings anymore
• I don’t care about anything that happens in the rest of the world or outside my front door.
• There’s not enough local/regional/national/world news here.
• The sports section sucks.
• It always arrives too early/late for me to read it.

Here are samples of how some papers handled Monday’s news:

San Francisco Chronicle headline: Chronicle’s strategy shift starts to pay off

The Chronicle said Monday that reshaping the newspaper’s business model is paying off financially even though, as anticipated, it has resulted in a sharp decline in circulation. For the six months that ended in September, The Chronicle’s daily circulation dropped 25.8 percent to 251,782, compared with the same period in 2008, the steepest decline among major U.S. metropolitan papers. …

Frank Vega, publisher of The Chronicle, said the newspaper’s loss in circulation was an expected result of moving away from a business model that depends mainly on advertising and instead relies on readers for a greater share of revenue.

The Chron also adds that subscription price increases and other changes have given it some profitable weeks after losing $50 million last year.

The Detroit News: Detroit newspapers lose less circulation than other big dailies

The steeper losses at other newspapers boosted the Detroit publications’ rankings among the largest in the country. The News pulled ahead from 50th place to 46th; the Free Press jumped from 20th to 17th.

“We radically changed our delivery model and throughout the industry we have seen greater losses,” Janet Hasson, senior vice president of audience development for the Detroit Media Partnership, said in a statement.
The Des Moines Register: Newspaper circulation falls, including at Register

Register Publisher Laura Hollingsworth said much of the decline is due to strategic changes, such as eliminating discounts, reducing unprofitable delivery in far corners of the state and increasing home delivery and single copy prices.

“Our unduplicated audience reach in central Iowa is higher today than it was a decade ago,” Hollingsworth said.

As you can see, things are doing well, so please stop telling everyone that they’re not.

(Photo: Reuters)

Just about everyone who covers media is talking about whether a potential Comcast-GE deal for NBC Universal will kick off a round of consolidation in media.

One executive — one very smart executive — who doesn’t think we’re in for a tidal wave of mergers is Viacom’s Philippe Dauman. (Word is Dauman earned a perfect score on the SAT — at the age of 13). After a speech at Executives’ Club of Chicago on Tuesday, we asked Dauman about consolidation.

“As far as we’re concerned, we ‘re focused on growing our brands, growing our business. We have tremendous brands with a lot of room for growth both in the U.S. and internationally. It’s a big opportunity for us.

“We’ve been involved involved in a lot of consolidation in our corporate history. The record of success in media consolidation has not been all that great for the most part so for ourselves we think the better strategy is to grow organically.”

But what does Dauman think about about the rest of the industry? To that question, he noted that “all of us in the traditional media business have seen the pitfalls” of big mergers, but Comcast may decide to chase a deal because of its unique circumstances. He didn’t elaborate, but we all know that Comcast has longed for more content for quite some time. The structure of the deal reportedly under consideration may work in Comcast’s favor since it doesn’t have to issue any equity.

Dauman isn’t the only smart guy in the media industry of course. Time Warner chief Jeff Bewkes made similar though slightly more cutting comments about the prospect of the Comcast-NBC deal last week and about what it said about success of previous big media mergers.

Dauman was more diplomatic.

“There’s a unique set of circumstances here that won’t necessarily in and of itself trigger a wave of other activity,” Dauman said.

Thanksgiving thank-you lists can get pretty lengthy. This year, add a newspaper to the things you’re thankful for. That, more or less, is the message that the Newspaper Association of America is delivering in an advertisement that it hopes daily papers will run this coming Monday. The ad will appear a week before the Audit Bureau of Circulations publishes its latest circulation statistics for North American newspapers.

As USA Today has already said, and other insiders have told us, circulation is going to fall compared with last year — and those declines at many papers likely will be worse than usual. That’s the kind of thing that advertisers don’t like to hear, and one of the reasons that they are devoting their dollars in increasing amounts to other media. But as the NAA will remind people, some of that sentiment might be misplaced. Here, for your viewing pleasure, is the ad.

YouTube, the video site, is celebrating the third anniversary since it was bought by Google with news that it now serves more than a billion views a day to users around the world.

In a blog by YouTube CEO and co-founder Chad Hurley, he reminisces about how he and co-founder/former CTO Steve Chen made a fun video declaring themselves the “burger kings of media”. How sweet.

But on the serious side of the media equation Hurley has some important points about the fast changing world of online video (You could also call it the ‘why we won’ manifesto).

Hurley says:

• Speed matters: Videos should load and play back quickly
• Clip culture is here to stay: Short clips are voraciously consumed and perfect for watching a wide variety of content
• Open platforms open up possibility: Content creation isn’t our business; it’s yours. We wanted to create a place where anyone with a video camera, a computer, and an Internet connection can share their life, art, and voice with the world, and in many cases they can make a living from doing so

Questions remain about the business model of YouTube, which is being built around the fledgling online video advertising sector. The company is yet to declare a profit. Yet with 40 percent of all online video viewing in the US, according to comScore, YouTube will have a lot of say in writing and re-writing the rules for Web video ads.

On a Credit Suisse call with investors this morning, some online advertising experts questioned whether YouTube has improved materially in their advertising mix though they acknowledged the hard work of the YouTube team to improve the advertising environment. One advertising executive on the call said YouTube has “improved year over year”.

When most Americans think of where to catch up with episodes of their favorite TV shows on the Web, they more than likely think of Hulu, the online video site owned by NBC, News Corp and Disney that offers free viewing of TV broadcast shows and archive movies. Second to Hulu would probably be YouTube.

But not Fancast. Despite being owned by the largest U.S. cable TV operator Comcast, it doesn’t even make the top 10 video sites in the U.S., according to comScore data. (Hulu is No. 5). One of the ways Hulu became better known was by launching a national TV advertising campaign which kicked off during this year’s Super Bowl TV extravaganza. Hulu’s user numbers jumped after those ads — and Fancast hopes for a similar boost.

Fancast has dubbed its debut TV campaign “See It For Yourself” and will feature a series of five spots with recaps of shows including CSI Miami, Glee, NCIS, How I Met Your Mother and Gilligan’s Island. Three TV spots will debut on CBS and also on targeted national cable networks. See the Fancast/CSI ad here: The campaign also features an online push and an outdoor drive with interactive bus shelters around the San Francisco area.

In truth, beating Hulu might not be Comcast’s biggest prize. It’s more likely to have its eye on its On Demand Online /TV Everywhere initiatives, which aim to make popular cable shows available on demand to paying subscribers. Fancast will be one of Comcast’s key platforms for that new service when it fully rolls out so building awareness of the site now is important.

(Photo: CSI Miami’s David Caruso/Reuters)

Over the last few days executives at Goldman Sachs’ Communicopia have talked about a stabilizing — or even improving — advertising market.

It’s not the only time they’ve talked about stabilization. It was the watchword of investors calls as far back as last spring. And it appears they were right. New figures out from TNS Media Intelligence show the advertising market wasn’t any worse in the second quarter than it was in the first.

That’s cold comfort considering the data show that advertising spending in the second quarter sank 13.9 percent from a year ago. For the first six months of 2009, spending is down some 14.3 percent from a year ago, or more than $10 billion in lost TV spots, print ads and radio jingles.

Here’s how TNS research guru Jon Swallen described it in a prepared statement:

While it’s tempting to interpret this as a positive indicator that things aren’t getting worse, the fact remains that the market has been steadily tracking at around 14 percent declines for several consecutive months and this represents billions of lost revenue. Early data from third quarter hint at possible improvements for some media due to easy comparisons against distressed levels of year ago expenditures.

The worst hit category for the first six months was automotive, with spending down 31 percent. Others that fared poorly (to nobody’s surprise) included financial services, down 24 percent; miscellaneous retail, down 18 percent; and travel & tourism, down 15 percent. Housing related advertising, which covers several categories, tumbled 29 percent.

And the prize for the worst media sector over the first six months goes to… radio. Spending on those pesky radio ads fell 24.6 percent, a touch more than newspapers at 24.2 percent.

But hey, at least the market isn’t getting worse.

What’s that? Jay Leno is moving to prime-time? You don’t say!

Frankly, it’s hard to remember the last time there was such hubbub about a TV show. It was, after all, the cover story in Time magazine. Not to be outdone, The New York Times, The Wall Street Journal, Reuters, AP, and probably every local news outlet between New York and Hollywood had a story about the talk show host — more often than not raising the question of whether he’s going to save network TV.

(You’ve got to give it to the public-relations machine on this one. They really worked the story. Of course, their spinning was augmented by a huge marketing effort. Stuart Elliott of the New York Times today estimated that NBC put out more than $10 million in promoting the show).

But there is more to the fall TV season than Jay Leno. The media buyers and planners over at  RPA offer a useful road map to the season in a recent report.

Their take on the fall season is fairly upbeat (maybe network TV doesn’t really need Leno to save it).

“For the first time in two years, network fortunes will not be held hostage to the industry’s labor problems, but will be determined, as they used to be, by content quality and scheduling… Based on what we’ve seen, the overall quality of that content looks better than it has in the past two seasons,” the report says.

Here, according to RPA, are some things to keep in mind heading into the season:

• The five broadcast networks will debut 21 shows, accounting for 22 percent of scheduling hours.

• Dramas and dramedies (a mix of comedy and drama) will increase from 43 percent to 48 percent of the schedule’s hours. Comedies will rise from 10 percent to 17 percent.

• Not a single new fall show is a foreign co-production (which had been looking like a trend until now).

• Medicine is hot, with three hospital dramas debuting this fall and a fourth starting midseason (”Trauma,” “Mercy”, “Three Rivers,” and “Miami Trauma”).

• Paranormal is big, too. Four new shows built around that theme will land this fall (”V,” “Eastwick,” “Flash Forward,” and “Vampire Diaries”).

Oh, and Jay Leno is moving to prime-time.

Are the Winter Olympics getting frozen out? Not exactly, but drumming up advertising and sponsorship dollars isn’t as easy as it used to be. Here’s how Andrew Benett, the global chief strategy officer of Euro RSCG, described what’s happening:  “You have a confluence of many factors happening here. One, winter versus summer. Two, a hangover from Beijing. And three, the economic times.”

Of those, the economic situation is the one that’s drawing away most of the money. Bank of America, General Motors, and Home Depot are just some of the big names that have dropped their sponsorship of the U.S. team.

But experts we spoke to also pointed to some broader problems facing the Winter Games. For one thing, behind the scenes, they say the IOC and USOC haven’t always been accommodating with the advertising community. For another, younger audiences (and thus advertisers) just aren’t that into some of the classic winter sports. It’s not that they don’t want to see athletes competing on the mountain — they would just prefer to watch them competing in newer, thrill sports like those of the X Games.

So, while the ugly economy — and Beijing hangover — may only be temporary problems, there are longer terms issues that must be tackled. And the stakes are high. Recall the International Olympic Committee, alone raises an estimated $4.5 billion from the combined sponsorship and global TV rights deals for every four-year period.

Keep an eye on:

• The Beatles take a step closer to selling their music online on Wednesday with the simultaneous release of the band’s re-mastered catalog and the MTV video game The Beatles: Rock Band (Reuters)
• Hollywood may have seen near record revenue from the box office this summer, but attendance was down and there were as many notable flops as hits (NY Times)
• AOL has appointed former Yahoo executive Brad Garlinghouse as president of its Web and mobile communications group (Reuters)

YouTube executives and spinmeisters have been pushing back more aggressively at the perception that the video site is a great big drain on Google’s bottomline, probably  losing $200 million to $500 million a year by some estimates. These execs say that hundreds of major advertisers are taking spots on YouTube against “hundreds of millions” of video views every week.

The problem with this is the lack of precise details. How much revenue is YouTube generating from these monetized videos exactly (even approximately)? And how much does it cost to stream and store those hundreds of millions of videos every week? Google and YouTube decline to provide any numbers other than to say things are moving in the right direction. Wall Street and investors are yet to be convinced.

Goldman Sachs analyst James Mitchell is the latest to have a shot at a respectable estimate for YouTube. He says it will generate around $300 million in 2009. He also thinks the best is yet to come from YouTube — and that Google will see some benefit.

We believe YouTube revenue will grow at 40 percent year-over-year or faster in 2010 as YouTube is generally under-monetizing its home page traffic versus peers, and as its home page is a natural venue for studios to advertise new movies.

For Google investors, the most important part of Mitchell’s analysis is that he thinks display advertising, of which YouTube is a major part alongside DoubleClick, could add 1-2 percent to Google’s revenue growth.

In the meantime, the majority of the videos uploaded to YouTube are done so by its users — and as the world’s most popular Web video site YouTube has a lot of users. Over a 100 million in the U.S. alone according to comScore. Goldman Sachs’ Mitchell says:

We do not expect serving query-specific video advertisements to represent a substantial business for the foreseeable future given branded advertiser discomfort with unknown content, and given consumer unwillingness to tolerate 30-second advertisements against 60 seconds or less of content; however, Google does not need such advertising to make YouTube profitable given YouTube’s cost leverage against Google’s existing assets and homepage traffic.

YouTube is signing up more so called professional content such as its latest deal with Time Warner on Wednesday with shows like “Ellen Degeneres Show” and “Gossip Girls”. For now, most of what they’re getting from Time Warner and others like Disney is promotional clips. We asked about getting more full-length shows like Hulu, and executives gave a very ‘watch this space’ type of response.

YouTube, meanwhile, is working hard to show that getting people to watch more and more video online is not as easy as it looks and involves lots of clever technology and algorithms that its engineers have been working on.  The idea — as the Wall Street Journal’s Digits blog explains — is to  make sure “people don’t just watch one video when they come to  the site”.

The company’s engineers are looking for ways to predict what topics will pique a user’s interest after they’re done watching a certain video, based on data about their viewing behavior.